In this lesson, Nick Palazzolo, CPA, breaks down the complexities of how different types of goods are accounted for in an inventory account. With a focus on practical examples like goods on consignment and goods in transit, he sheds light on the determination of inventory ownership, including who holds the legal title to the items and the corresponding inventory implications. Throughout the discussion, Nick dives into the specifics of FOB destinations and shipping points, consignment arrangements, buyback agreements, high-return items, and installment sales to clarify when goods should be recorded as inventory and when they should be recognized as a sale. This guidance equips you with the knowledge to handle these scenarios with clarity and confidence.
Lesson: Items Included in the Inventory Account
In this lesson, Nick Palazzolo, CPA, breaks down the complexities of how different types of goods are accounted for in an inventory account. With a focus on practical examples like goods on consignment and goods in transit, he sheds light on the determination of inventory ownership, including who holds the legal title to the items and the corresponding inventory implications. Throughout the discussion, Nick dives into the specifics of FOB destinations and shipping points, consignment arrangements, buyback agreements, high-return items, and installment sales to clarify when goods should be recorded as inventory and when they should be recognized as a sale. This guidance equips you with the knowledge to handle these scenarios with clarity and confidence.
Updated: Oct. 20, 2021 Create an account